Nerd alert

Fi­nance de­part­ment most likely to pro­duce in­ter­nal fraud­sters

Finweek English Edition - - Economic trends & analysis - GARTH THE­UNIS­SEN

SO YOU THOUGHT lawyers were sharks? It turns out that it’s the bean-count­ing fi­nance nerds that you re­ally have to worry about. Ac­cord­ing to re­search by KPMG’s foren­sic au­dit­ing di­vi­sion re­ported in Profile of a Fraud­ster 2007, 36% of fraud­sters were found to work in the fi­nance de­part­ment fol­lowed by op­er­a­tions/sales (32%) and com­pany CEOs (11%).

The sur­vey also re­ported that your typ­i­cal fraud­ster is most likely to be mid­dle-aged and male: KPMG found that 85% of fraud­sters were men while 70% were aged be­tween 36 and 55. What’s more, a full 89% were in­ter­nal em­ploy­ees.

Prob­a­bly most dis­turb­ing is the find­ing that there ap­pears to be no cor­rela- tion be­tween per­ceived loy­alty and ac­tual hon­esty. In 36% of pro­files fraud­sters had been work­ing for the com­pany for two to five years be­fore com­mit­ting fraud, while 22% had been with the com­pany for more than 10 years. Just 13% of per­pe­tra­tors had worked at their com­pa­nies for less than two years prior to com­mit­ting fraud.

Also in­ter­est­ing is that theft of cash (25%) is the pre­ferred modus operandi, fol­lowed by other fraud (19%), false fi­nan­cial re­port­ing (15%), kick­backs (13%) and theft of other as­sets (6%).

And if you’re an MD think­ing of giv­ing a fraud­ster a sec­ond chance, con­sider that 91% of per­pe­tra­tors didn’t stop af­ter one fraud­u­lent act but com­mit­ted mul­ti­ple acts of em­bez­zle­ment.


Source: KPMG

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